Simple Money, Rich Life with Bob Lotich

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For licensing information, please visit nmlsconsumeraccess.org. English philosopher Francis Bacon said that money is a great servant, but a bad master. Hi, I'm Rob West. If we don't learn to manage money wisely to take control of it, it will soon master us.

It's one way or the other. Today, Bob Laudick tells us how to be the master and not the servant when it comes to money, and he makes it pretty clear as well. Then it's on to your calls at 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, we're delighted to have Bob Laudick on the program today. Bob is a financial coach, and for the last 14 years, he and his wife Linda have shared their best lessons with over 54 million readers and listeners in their award-winning book, website, seedtime.com, podcast and courses.

Bob is also the author of Simple Money, Rich Life, Achieve True Financial Freedom, and Design a Life of Eternal Impact. Bob, it is an absolute treat and joy to have you with us today. Well, the pleasure is all mine, Rob.

I'm so excited to be here. I'm looking forward to diving into this topic, which is on both of our hearts in such a significant way. And we've heard, of course, some amazing testimonies over the years here on this program. But I want to start with your story. And I understand it all goes back to 2002 when your car broke down.

Is that right? Yes, I was living in a small Florida town, driving to put my paycheck into the bank that day. I'd just gotten paid. And as I'm driving, my car breaks down, which, okay, car breaks down. That's not a good day. But the reason I had been driving is because I was going to deposit my check at the bank so I could pay my rent that was due that day.

But if I didn't get it there, they're going to talk on a $50 late fee. And I was so broke living off credit cards that I couldn't afford the $50 late fee. So in that moment, I realized that my financial life was a house of cards. And then I had a bad altimeter.

There was just kind of the gust of wind that knocking that house of cards down. Yeah, boy, it's a story. I know that so many, including myself, can identify with. We've all been there at various times. And yet God uses those moments to give us clarity when he wants to teach us something.

So what were some of the takeaways you had? So out of that moment, I remember being in there grabbing that steering wheel with hot tears coming down my eyes, asking God for wisdom. And then as I prayed that, it's amazing what happens when you pray and you ask God for wisdom.

He gives it. And so from that, I just began diving into the Bible while reading as many practical books and, you know, magazines that I could get my hands on to kind of learn about all this. And I ended up stumbling on this John Wesley quote that just really impacted me where he said, I earn all I can and then I save all I can.

And by that, he meant reducing his expenses so that I can give all that I can. And I it just so deeply impacted us because he saw his gift as an opportunity to earn more money and then to also funnel that back into the kingdom. And so we've just lived our lives by that.

Yeah. And it's at that moment that you realize that money is not bad. It was created as a good blessing from the Lord, but it has to be a tool. And when we see it as an end and not a means to an end, well, everything goes wrong at that point. And of course, all of that finds its roots in God's Word. We see that in Scripture.

We talk about that all the time on this program. Share with us a bit about how God's Word has inspired you on this journey. So as I begin digging into the Word, I mean, just like so many of us who've been on this journey, I start reading 2 Corinthians 9. And so what it looks like, what giving looks like in the New Testament. And then read 1 Timothy 6, where Paul is admonishing all those who are rich in this world of which most of us in the West are. And then reading Proverbs like where it talks about how the borrower is a slave to the lender, or Proverbs 13.11 where it talks about gathering money little by little is the key to making it grow. And so anyway, so yeah, so I just began absorbing as many scriptures as I can allow that to be the thing that would define our actions that we took.

Yeah, that's powerful. And of course, we know the stats that 70% of couples say that money is a source of conflict in marriage. How did this understanding this new realization from God's Word around money affect your relationship with your wife, Linda? Well, yeah, anybody who has been married, and has had financial disunity, like fully understands how bad it can be. And then on the other hand, once you get in unity with your spouse, it's such a powerful unifying force. And so it was the same thing for us. Like once we got on the same page financially, and really made the word our foundation, there's so much more peace in our households who are fighting less about money. But then on top of that, we began moving forward so much faster than I ever thought possible.

Oh, I can only imagine. Well, we're going to continue to unpack that, as well as how you can put this into practice, these principles that Bob's talking about today, and that formula earn, save, give, and enjoy. What does that look like applied in your financial life?

Bob Lonick with us today, we're talking simple money, rich life, and we'll be back with much more in the next video. Faith in Finance is grateful for support from Soundmind Investing. For more than 30 years, they've offered financial wisdom for living well.

SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement. More information, including the short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. Thanks for joining us today on Faith in Finance. With me today, Bob Lonick, the author of Simple Money Rich Life, achieved true financial freedom and designed a life of eternal impact. Before the break, Bob was sharing his story of how God got his attention, and that directed him back to his word as he uncovered all that God has for us in this area of money as a steward. Bob, you were sharing a bit about the impact of really turning that around and some of the things you discovered in Scripture and how that really impacted your relationship with your wife, Linda.

I'd love for you to continue to unpack that. Yeah, I mean, some of the specifics that were just mind-blowing was, again, just eliminating so much of the stress in our financial life was fantastic. But beyond that, we began moving so much faster towards our goals. So we get one car paid off, then the next car, then the credit cards and the student loans. And we ended up paying off all of our debt, including our house, by age 31. And we both were standing there in awe of what God did, but it all started with us tapping into the biblical wisdom and asking God, inviting him into our financial life.

Well, I know our listeners are saying, yeah, I need more of that. So let's put these principles into practice. I want to start as we talk about your book here for a moment with what your book is not about. Yeah, because that's a good question when you're talking about a money book, specifically in the Christian world, because you never know where you're going to find it. But in our case, it's not about manipulating God. It's not about some prosperity gospel naming and claiming thing. But it is about really tapping into the biblical principles and promises that God has made. And obviously, there's a lot of scripture about money and just kind of exploring that. But it's also not a theological discourse on money, like I'm not ten Keller, but I do, you know, apply the practical pieces that I find in the Bible, and just kind of weave it all together. And then we're also not a big fan of the shame and guilt thing that I think a lot of people see in the financial space.

And that's not our thing. And we really want you to be able to enjoy what God has blessed you with as well. So it's not all about, you know, penny pinching and depriving yourself of everything in life, you know, and so that's kind of the meat of it.

Yeah, that's really helpful. And it aligns so well with what we do here on this program, because it's about being hopeful and reverent, but also just finding those practical steps forward as we apply biblical principles. Let's do that as we unpack your formula, earn, save, and enjoy. Why don't we start with saving? What did you learn there? Yeah, so this whole formula is based off that John Wesley quote, we decided to build our book around this and break out each section.

And one of them is being the saving part that you're talking about. And one of the things that really stuck out to us as we were kind of exploring this and what this look like with our money, you know, because for such a long time, I was tracking my net worth. And I'm like, Alright, I'm doing this. And it's a great way to keep measure your progress and all this stuff.

But I always was bothered by that term. And so, because I'm like, What does Jesus say that I'm worth? It's not any number, whether it's $10 million or negative 10 million, you know, it's so he has a different definition of my net worth. And so we just decided we're going to change that on our spreadsheet, we're going to scratch out net worth, and we're gonna write assets under management. Because we understand that everything we have, we're just managing for God. And when we actually have that constant reminder, every time we pop open that spreadsheet and see assets under management, it's like it just changes how you make financial decisions, you know, sure does. And so much of money management is about our perspective. Is that an eternal perspective? Or is it really just focused on the temporal the here and now? Let's turn to earning?

What do we need to know there? Yeah, well, you know, like you mentioned at the beginning, this whole idea that, you know, money is a terrible master, but that it is a great servant. And that's something that, you know, we work really hard, specifically in the book to help you get the right heart posture, because obviously, the New Testament has so many warnings about money and wealth. And so there is a heart posture that needs to be right if we are going to be kingdom people who are trying to earn more to advance the kingdom, you know, but on the practical side of all this, like we've identified four keys to earning more in the digital era. And so the first one is to operate within our God given gifts and passions that he's given us, because those are unfair advantage. Because when you are working, your work is aligned with the thing that God has created you to do.

It's like you have an unfair advantage. And then the next thing there is to continue to learn and develop that craft. And so if God gave you an ability and area, that doesn't mean that you don't ever have to do anything to develop it, but you have to keep working and honing that skill, developing that for the glory of God. And then the third key is to solve a significant problem, or to make something better. And you can look at, you know, whatever job you are, you're you're generally compensated in proportion to the size of the problem that you're solving. Okay, and so this is why Elon Musk, tackling some of the world's greatest problems has been compensated very well for that. And then the final key here is to operate where demand is high. Okay, so becoming a VCR repairman right now probably isn't the strongest and best use of your time, you know, but when you identify that demand, what are the things are in demand, you find that intersection of all these things, it's like, that's how you set yourself on a path to continue to increase your earnings in this digital era.

Yeah, and there's more opportunity than ever. And it seems like in unique ways to really tap into how God has wired you. All right, we're doing a flyover here.

Let's continue that flyover. And the next one is giving. And this really, I think speaks to what you said this book is not about. It's not about manipulating God. It's not about shaming or sir guilting us into doing something. There's a whole different idea around giving we see in God's Word, isn't there?

Yeah, yeah. And one of the things that we really try to highlight is the joy of giving. And I think a lot of people hear that and they roll their eyes. It's like, or whatever. I remember reading Jesus said, it's more blessed to give than receive and feeling like he's just he doesn't get it.

Like he's wrong. Like it's not I love receiving stuff. You know, I've always been I've always enjoyed receiving. But as my wife and I have really began living this out and seeking the joy in it specifically. And so there's a couple different things that we did. So one thing that we did, there was a game changer for us as we at the beginning of the month created a category budgeting category that money came in, we put it in that category, we call it a seed account.

Once it went in there, it's no longer ours. And then throughout the month, we would just pray, God, what do you have for us to do? And he would present opportunities for us. And the money is just now sitting there waiting to be given away to these different things. And Rob, I'm telling you, it made giving more fun than it ever been in my entire life. And so it was such a powerful, simple little hack that we did, that really added so much joy to giving in our lives. And as soon as you experience that you want more of it. And so then you start to get creative on other places you can cut back, right? So you get more into that seed envelope. Exactly.

That's so good. All right, the final category is enjoyment. And I think this is another big one that we can miss that is also found in God's Word that we should enjoy God's provision.

How do we do that? Yeah, well, I think there's a lot of different ways here. But you know, I think I think it was Cheryl Crow or something that said something to the effect of, I'm going to butcher the quote, but this idea of enjoying things is really appreciating what you have. And there's just something there when we can actually look at what we have and treasure that because I'm telling my kids all the time, it's like you can make any moment miserable, or you can make it fun.

We can be on the best vacation you could ever dream and you can make it miserable, we have that opportunity. And so we can truly be grateful for the things that we have, but we can truly appreciate them. And again, remember, the Bible tells us to be grateful to be thankful in all things, this is God's will for us. And so I think it starts with that and understanding how blessed we are.

And that just really changes your perspective. But, but within that, I think we can enjoy all facets, we can enjoy the earning side, we can enjoy developing our craft, and we can enjoy saving, you know, and then we can also enjoy giving. And so that's been the goal of how all these pieces tie together. Oh, that is so good. Well, we're gonna have to have you back to dive into each one of these a little deeper.

But unfortunately, that's all the time we have today. Bob, thanks for stopping by. Oh, I appreciate it, Rob.

Thank you so much. That's our friend and financial coach, Bob Laudick. We explore more topics like this in our quarterly magazine, Faithful Steward. The latest issue focuses on the pursuit of wisdom and how to align your faith and finances for God's glory. To receive it each quarter, become a FaithFi partner with a gift of $35 a month or $400 a year. Just visit faithfi.com slash give. Are you looking for a better way to align your faith with your finances? The FaithFi app is here to help with tools to track your spending, plan your giving, and grow in wise stewardship. You'll learn to see money not as your security, but as a tool for God's glory. Rooted in biblical principles, FaithFi equips you to trust God more fully and steward his resources faithfully.

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Investing involves risks, including possible loss of principal. Thanks for joining us today on Faith and Finance. I'm Rob West, taking your calls and questions. We've got lines open. We're ready for you at 800-525-7000. That's 800-525-7000. You can call right now.

Let's head to Kansas City. Ken, thanks for your patience, sir. Go ahead. Hey, thanks so much for taking my call.

I really enjoy your show. My question is really somewhat in general, but I've got a friend who is almost ready to retire, who is a union electrician. And when the tariffs came in and took a tank, he had a really big complaint that that $100,000 he lost would never be replaced. And I said, well, sure it will.

You know, once the markets go back up, whether it's this year, next year, whatever, you'll get that back. And I just didn't know how to explain that to him. But I'm I'm right with that, ain't I? No, totally. Yeah, exactly right. So, you know, here's the reality.

I mean, a few thoughts. One is the money he, quote, lost in the recent market dip due to the tariffs is absolutely not gone forever. I think you need to distinguish between what are called unrealized losses versus realized losses. Remember, an unrealized loss is an investment dropping in value on paper. But until you sell, you sell, no actual loss is locked in.

And so that's the first reality. Secondly, historically, markets recover from corrections like this. So, for example, the S&P 500 took about four months on average to bounce back from a 10 to 20 percent correction over time. And even bear markets where you've got a 20 plus percent drop on average recover in one to two years. And that would be true of 2008, the financial crisis, as well as the 2020 COVID crash. So I would say the recent tariff driven plunge saw the S&P 500 drop 10 and a half percent about. But it's already showing signs of stabilizing. We've recovered most of that. And again, on average, it takes about four months to bounce back from a correction like we saw.

The other silver lining is assuming he's still making contributions. You know, you're able to buy when the market pulls back. Let's say you're making a consistent contribution to a retirement plan. You're able to buy more shares at lower prices for the same monthly or contribution coming out of the paycheck. And that sets you up for bigger gains when the market rebounds. Because, again, if you're buying, you know, you're putting in the same amount out of every paycheck, but stocks are cheaper because the market has pulled back. You're buying more shares of the same mutual funds or, you know, whatever he's buying.

And then as that market recovers, he stands to benefit. So, you know, I think, you know, those are the kinds of things I would be talking to him about. Does that make sense? Absolutely. You've answered my question perfectly as to what I kind of thought it would be. This just helps support my when I go back and chat with him again as to the direction he's that he's going to be okay. Yeah, exactly right. And the other piece I would throw out there, not to throw too much at you, but, you know, keep in mind, even once he hits retirement, let's say it's 65.

Maybe it's not. But if it is, I mean, he still needs to take a long term perspective. So even though you get more conservative as you get close to retirement, I would say the typical retiree should still have somewhere between 40 and 50 percent in stocks. Because remember, you know, we need to take I mean, if he lives, you know, into his 90s, he's still got three decades for this money to grow or to at the very least, you know, have a portion of it that's growing in stocks to offset perhaps what he's pulling out to supplement his income. So even at retirement, we're still able to take a long term perspective. And I think that's really key to being able to appreciate that time is on his side. He doesn't need to get anxious.

He doesn't need to be too aggressive, but the market will recover in time. I certainly agree with you and you've answered it perfectly. I really appreciate that. Hey, everybody needs a brother in law like you can. We appreciate your call today. Thanks for walking alongside your brother in law. We appreciate it.

Let's go to Ohio. Hey, Brian, how can I help? Hey, how's it going?

It's going good. I got a question about rolling a traditional IRA into a rock IRA. It was a rollover account from a previous job. And so I've got currently I got fifty five thousand in the Roth and thirty seven thousand in the traditional. Okay. Yeah. Got it. And so do you've got in addition to that another account that would be coming into the traditional or are you looking to move the thirty seven? We put in I put in two hundred dollars a month into the end of the Roth.

And so it would just be an extra amount of that thirty seven into the Roth. Got it. Yeah. You know, how far out are you from retirement at this point?

Thirty years. Okay. Yeah. You got some time on your side.

Yeah. I mean, I like the Roth a lot, especially at your age, because, you know, the real benefit of the Roth IRA is you get that tax free growth and you're never going to pay any tax on the gains when you pull it out in retirement. You also don't have the required minimum. So if you were to over accumulate or find you don't need some of this, you could pass it on to the kids or, you know, to heirs. And, you know, they wouldn't pay any tax on it as it comes out either, which is just a huge benefit. They also don't require you to take anything out in a required minimum distribution with a Roth, whereas they do with the the traditional. So if you were a little closer to retirement, I'd say keep both buckets. But with you being that far away, I'd say if you have the cash flow to absorb the tax bite, which all that thirty seven thousand or whatever portion you convert would be added to your taxable income in the year of the conversion. So you need to be ready to pay that without taking anything out of the account. So you need to have the surplus to do that. Then I would say, you know, getting close to one hundred K and Roth's to grow for the future makes a lot of sense.

So I like that a lot. Yeah, folks, as we finish out the program today, let me just invite you to partner with us here at Faith and Finance. This program is brought to you only because of our underwriters and your financial support. As a listener supported ministry, your ability to partner with us as a monthly faith by partner or one time giver is absolutely critical. And so if you've been blessed by the ministry, maybe you listen regularly.

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